New car sales are declining, but in the used car market, sales are stable. At Askeladden-owned Rebil, things are going well.
New car sales have been falling since the summer, and 2023 is now set to be a year with much lower sales than we’ve seen in the past two years, according to the Road Traffic Information Board (OFV).
In October, 28.9 per cent fewer new cars were registered than in the same month last year, latest figures from OFV show.
However, the used car market remains stable – and this is true. So far this year, the level of used car sales is barely higher than last year’s level.
This is well felt at used car dealer Rebil.
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New trend: Europe buys Norwegian used cars
-We need more cars to sell. “We have more to do than ever before,” says Jonathan Barr, chief analyst and co-founder of Rebil to E24.
– He says things are going well and there are a lot of people who want to buy a used car every day.
Low prices for used cars
Rebil started in 2021, during the pandemic — a time when customers were willing to pay more for a used car rather than wait for a new one, according to Barr.
Now waiting times for new cars are almost over, at the same time people want to spend less money on cars, he said.
– This is the reason for the accumulation of new cars and the decline in prices of the most expensive models in the used car market. But even though prices are falling, this does not mean that people stop shopping.
Used car prices fell more than usual this year as some manufacturers reduced new car prices.
After Tesla announced sharp price cuts on several of its models in January, investment director Robert Ness at Nordea, according to NTB, predicted a collapse in the used car market for the Tesla Model Y, which was reduced by NOK 120,000.
However, Rebil is seeing strong growth.
In 2022, the company, which is part of the Askeladden startup, had sales of NOK 178.4 million. The annual result ended at minus NOK 22 million. This year, the company estimates it will double its sales to NOK 400 million.
“We challenge the industry by making things easier without making them more expensive,” says Barr.
He says Rebil offers a 14-day open buying process.
-We have given people a new way to buy and sell used cars. This explains a lot of our growth, he says.
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He describes a “very demanding” market situation.
On the owner side of Rebil we find Norway’s largest car trading chain Møller Mobility Group. Müller owns just over 21 percent of the founding company, with Askeladden & Co. being the largest owner with 55 percent.
Møller sells new and used cars, and on Tuesday this week reported a strong second-quarter result, despite a large bank of orders for new cars. There has been good development in both the service and used car markets.
New car sales fell 10 percent last year
The new car market situation is now “very demanding”, according to CEO Peter Hellmann of Møller Mobility Group.
Regarding the presentation of the results, Hellman said that the combination of increased interest rates, higher inflation, increased taxes on electric cars and increased price competition means that demand intake is much lower than last year.
Hillman also said that market forecasts are a challenge.
He said: We expect that high interest rates, uncertainty and strong competition will affect the new car market in 2024 as well, which will put pressure on the development of profits.
– Sales are going in crab equipment
It has been clear for several months in the new car market that interest rate increases and strong price growth are being felt by households, according to the Road Traffic Information Council.
– Many people are now very cautious about prioritizing the purchase of new cars, says OFV Director, Øyvind Solberg Thorsen, in a message.
– New passenger car registration numbers in October clearly show this, because in the same period of the last two years we had a high registration rate. He says new car sales are now going full speed.
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The industry is now reporting “the introduction of very low-cost contracts,” according to OFV.
Solberg Thorsen expects the total for this year to be just under 130,000 new passenger cars registered for the first time in Norway.
In any case, it is significantly lower than last year’s figure of 174,000 new passenger cars.
Rebel is not concerned about slow sales spreading to the used car market.
– If the used car market collapses, it will be because Norwegians can no longer afford cars, Baar says.
– For many, getting rid of the car is not an option. It is necessary to make daily life rise.
He expects that sooner or later the market will shift, so that used cars will become more expensive and it will be easier for new car dealers.
-It will be good for the entire industry. We’re already seeing that some models have exceeded the price floor, says Barr.
New trend: used car exports
In the past two years, used car exports from Norway to Europe have increased sharply.
“This market almost didn’t exist when we started,” says Barr.
He points out that the strength of the Norwegian krone has made Norwegian cars cheaper for foreigners.
The weak krone changes the Norwegian used car market: – There has been a huge increase
– If the value of the Norwegian krone rises significantly, we expect a decrease in demand from abroad. In this case, used car prices will fall, Barr says.
At the same time, imports of used goods have almost stopped, according to OFV figures.
Only 3,532 used passenger cars were imported this year, 73.6 percent fewer than at the same time last year.
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